AV PROMOTIONS HOLDINGS LIMITED

Transcription

1 AV PROMOTIONS HOLDINGS LIMITED AV (Incorporated in the Cayman Islands with limited liability) Stock Code: 8419 First Quarterly Report 2018

2 CHARACTERISTICS OF GEM OF THE STOCK EXCHANGE OF HONG KONG LIMITED (THE STOCK EXCHANGE ) GEM has been positioned as a market designed to accommodate small and mid-sized companies to which a higher investment risk may be attached than other companies listed on the Stock Exchange. Prospective investors should be aware of the potential risks of investing in such companies and should make the decision to invest only after due and careful consideration. Given that the companies listed on GEM are generally small and mid-sized, there is a risk that securities traded on GEM may be more susceptible to high market volatility than securities traded on the Main Board of the Stock Exchange and no assurance is given that there will be a liquid market in the securities traded on GEM. Hong Kong Exchanges and Clearing Limited and the Stock Exchange take no responsibility for the contents of this report, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this report. This report, for which the directors (the Directors ) of AV Promotions Holdings Limited (the Company ) collectively and individually accept full responsibilities, includes particulars given in compliance with the Rules Governing the Listing of Securities on GEM of the Stock Exchange (the GEM Listing Rules ) for the purpose of giving information with regard to the Company and its subsidiaries (together the Group ). The Directors, having made all reasonable enquiries, confirm that, to the best of their knowledge and belief, the information contained in this report is accurate and complete in all material respects and not misleading or deceptive, and there are no other matters the omission of which would make any statement herein or this report misleading.

3 CONTENTS Corporate Information 2 Financial Highlights 4 Unaudited Condensed Consolidated Income Statement 5 Unaudited Condensed Consolidated Statement of Comprehensive Income 6 Unaudited Condensed Consolidated Statement of Changes in Equity 7 Notes to the Unaudited Condensed Consolidated Financial Statements 8 Management Discussion and Analysis 14 Other Information 18 1 AV PROMOTIONS HOLDINGS LIMITED First Quarterly Report 2018

4 CORPORATE INFORMATION BOARD OF DIRECTORS Executive Directors Mr. Wong Man Por (Chairman) Mr. Wong Hon Po Mr. Wong Chi Bor Ms. Fu Bun Bun Independent non-executive Directors Mr. Chow Chun To Mr. Chen Yeung Tak Mr. Cheung Wai Lun Jacky Mr. Chan Wing Kee AUDIT COMMITTEE Mr. Chow Chun To (Chairman) Mr. Chen Yeung Tak Mr. Cheung Wai Lun Jacky REMUNERATION COMMITTEE Mr. Chan Wing Kee (Chairman) Mr. Chen Yeung Tak Mr. Wong Hon Po NOMINATION COMMITTEE Mr. Wong Man Por (Chairman) Mr. Chan Wing Kee Mr. Chow Chun To AUTHORISED REPRESENTATIVES Mr. Wong Man Por Mr. Wong Wah COMPLIANCE OFFICER Mr. Wong Man Por HEADQUARTERS AND PRINCIPAL PLACE OF BUSINESS IN HONG KONG 6th Floor, Leader Centre, 37 Wong Chuk Hang Road, Aberdeen Hong Kong HONG KONG BRANCH SHARE REGISTRAR Tricor Investor Services Limited Level 22 Hopewell Centre 183 Queen s Road East Hong Kong CAYMAN ISLANDS PRINCIPAL SHARE REGISTRAR AND TRANSFER AGENT Estera Trust (Cayman) Limited PO Box 1350 Clifton House 75 Fort Street Grand Cayman KY Cayman Islands COMPLIANCE ADVISER Halcyon Capital Limited 11th Floor, 8 Wyndham Street, Central Hong Kong AUDITOR PricewaterhouseCoopers Certified Public Accountants 22nd Floor, Prince s Building, Central Hong Kong AV PROMOTIONS HOLDINGS LIMITED First Quarterly Report

5 CORPORATE INFORMATION (Continued) COMPANY SECRETARY Mr. Wong Wah REGISTERED OFFICE IN CAYMAN ISLANDS PO Box 1350 Clifton House 75 Fort Street Grand Cayman KY Cayman Islands COMPANY S WEBSITE STOCK CODE 8419 LEGAL ADVISER Cheung and Choy Rooms , 4 th Floor Hutchison House 10 Harcourt Road, Central Hong Kong PRINCIPAL BANKER Industrial and Commercial Bank of China (Asia) Limited 33rd Floor, ICBC Tower 3 Garden Road, Central, Hong Kong OCBC Wing Hang Bank Limited 161 Queen s Road, Central, Hong Kong United Overseas Bank 23rd Floor, 3 Garden Road, Central, Hong Kong 3 AV PROMOTIONS HOLDINGS LIMITED First Quarterly Report 2018

6 FINANCIAL HIGHLIGHTS The unaudited consolidated revenue of the Company (together with its subsidiaries, the Group ) for the three months ended 31 March 2018 increased by approximately 10.2% to HK$34.7 million as compared with the corresponding period in For the three months ended 31 March 2018, the Group recorded a net profit of approximately HK$68,000 which represent an increase of approximately 309.1% as compared with the corresponding period in The Board does not recommend the payment of dividend for the three months ended 31 March AV PROMOTIONS HOLDINGS LIMITED First Quarterly Report

7 The board of Directors (the Board ) of the Company is pleased to announce the unaudited condensed consolidated results of the Group for the three months ended 31 March 2018 (the Reporting Period ) together with the unaudited comparative figures for the corresponding period in 2017, as follows: UNAUDITED CONDENSED CONSOLIDATED INCOME STATEMENT For the three months ended 31 March 2018 Three months ended 31 March Notes HK$ 000 HK$ 000 (Unaudited) (Unaudited) Revenue 3 34,677 31,463 Cost of sales (25,475) (23,953) Gross profit 9,202 7,510 Other (losses)/gains, net (16) 80 Selling expenses (1,055) (934) Administrative expenses (6,876) (5,692) Operating profit 1, Finance income Finance expenses (1,307) (1,056) Finance expenses net (1,239) (955) Profit before income tax Income tax Profit for the period attributable to owners of the Company Basic and diluted earnings per share for profit attributable to owners of the Company (HK cents) AV PROMOTIONS HOLDINGS LIMITED First Quarterly Report 2018

8 UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME For the three months ended 31 March 2018 Three months ended 31 March HK$ 000 HK$ 000 (Unaudited) (Unaudited) Profit for the period Other comprehensive income: Items that may be reclassified subsequently to profit or loss Currency translation differences 1, , Total comprehensive income for the period attributable to owners of the Company 1, AV PROMOTIONS HOLDINGS LIMITED First Quarterly Report

9 UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY Share Share Exchange Other Retained Total capital Premium reserve reserves earnings equity HK$ 000 HK$ 000 HK$ 000 HK$ 000 HK$ 000 HK$ 000 As at 1 January 2017 (audited) (2,576) 5,314 33,776 36,514 Comprehensive income Profit for the period Other comprehensive income Currency translation differences Total comprehensive income As at 31 March 2017 (unaudited) (2,237) 5,314 33,798 36,875 As at 1 January 2018 (audited) 4,000 41, ,314 29,166 80,583 Comprehensive income Profit for the period Other comprehensive income Currency translation differences 1,921 1,921 Total comprehensive income 1, ,989 As at 31 March 2018 (unaudited) 4,000 41,901 2,123 5,314 29,234 82,572 7 AV PROMOTIONS HOLDINGS LIMITED First Quarterly Report 2018

10 NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 1 GENERAL INFORMATION, REORGANISATION AND BASIS OF PRESENTATION 1.1 General information The Company was incorporated in the Cayman Islands on 23 February 2017 as an exempted company with limited liability under the Companies Law (Cap. 22, Law 3 of 1961 as consolidated and revised) of the Cayman Islands. The address of the Company s registered office is Estera Trust (Cayman) Limited, PO Box 1350, Clifton House, 75 Fort Street, Grand Cayman KY1-1108, Cayman Islands. The Company is an investment holding company and its subsidiaries are principally engaged in provision of visual, lighting and audio solution services in Hong Kong, the PRC and Macau (the Business ). The ultimate holding company of the Company is Jumbo Fame Company Limited ( Jumbo Fame ) incorporated in the British Virgin Island ( BVI ). The ultimate controlling party of the Group is Mr. Wong Man Por ( Mr. MP Wong ). The shares of the Company (the Shares ) were listed (the Listing ) on the GEM of the Stock Exchange by way of placing and public offer (collectively, the Share Offer ) on 21 December 2017 (the Listing Date ). These unaudited condensed consolidated financial statements are presented in HK dollars ( HK$ ) and all values are rounded to the nearest thousand (HK$ 000) except when otherwise indicated. 1.2 Reorganisation For the purpose of the Listing, the Group underwent a reorganisation (the Reorganisation ), pursuant to which the companies engaged in the Business were transferred to the Company. The Reorganisation involved the followings: (a) (b) On 23 February 2017, the Company was incorporated in Cayman Islands and is ultimately controlled by Mr. MP Wong. On 24 February 2017, AV Promotions (BVI) Limited, AVP (BVI) Limited and AVP (Macau) Investment Limited were incorporated in the BVI with their ordinary shares allotted and issued to the Company. AV PROMOTIONS HOLDINGS LIMITED First Quarterly Report

11 (c) (d) On 7 April 2017, AV Promotions (BVI) Limited acquired the entire issued share capital of AV Promotions Limited at a consideration of HK$4,862,081 from Mr. MP Wong and Ms. Kong Suet Yan (the Spouse of Mr. MP Wong) ( Mrs. Wong ) (holding on trust for Mr. MP Wong), its then shareholders. The consideration was satisfied by the allotment and issue of 99 new shares in AV Promotions (BVI) Limited credited as fully paid to the Company. On 10 April 2017, AVP (BVI) Limited and AVP (Macau) Investment Limited acquired the entire issued share capital of AVP (Macao) Limited at a cash consideration of MOP300,000 in aggregate from Mr. MP Wong and Mr. Wong Chi Bor ( Mr. CB Wong ) (as a representative party and registered owner for the benefit of Mr. MP Wong), the brother of Mr. MP Wong, its then shareholders. 1.3 Basis of presentation Immediately prior to and after the Reorganisation, the Business is mainly conducted through AVP Macao Limited, AV Promotions Limited and its subsidiaries (collectively referred as to the Operating Companies ). Pursuant to the Reorganisation, the Business was transferred to and held by the Company. The Company and newly incorporated subsidiaries have not been involved in any other business prior to the Reorganisation and does not meet the definition of a business. The Reorganisation is merely a reorganisation of the Business with no change in controlling shareholder and management. Accordingly, the Group resulting from the Reorganisation is regarded as a continuation of the Business conducted through the Operating Companies and the consolidated financial statements have been prepared and presented as a continuation of the consolidated financial statements of the Operating Companies, with the results, assets and liabilities recognised and measured at the carrying amounts of the Business under the consolidated financial statements for all periods presented. Inter-company transactions, balances and unrealised gains/losses on transactions between companies now comprising the Group are eliminated on combination. 9 AV PROMOTIONS HOLDINGS LIMITED First Quarterly Report 2018

12 2 BASIS OF PREPARATION The unaudited condensed consolidated financial statements have been prepared in accordance with Hong Kong Financial Reporting Standards ( HKFRSs ) under the historical cost convention. The preparation of unaudited consolidated results in conformity with HKFRSs requires the management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets, liabilities, income and expenses on a year to date basis. Actual results may differ from these estimates. In the current period, the accounting policies applied are consistent with those of the consolidated financial statements for the year ended 31 December 2017, as described in those consolidated financial statements except that the Group has adopted all the new and revised HKFRSs issued that are relevant to its operations and effective for its accounting period beginning on 1 January The application of these new and revised HKFRSs did not result in significant changes to the Group s accounting policies, presentation of the Group s financial statements and amounts reported for the current period and prior years. The Group has not early applied the new and revised HKFRSs that have been issued but are not yet effective. The Directors anticipate that the application of these new standard(s), amendments and interpretation(s) will have no material impact on the unaudited condensed consolidated financial statements. AV PROMOTIONS HOLDINGS LIMITED First Quarterly Report

13 3 REVENUE Revenue is measured at the fair value of the consideration received or receivable, and represents amounts receivable for services rendered, stated net of discounts and value added taxes. The Group recognises revenue when the amount of revenue can be reliably measured; when it is probable that future economic benefits will flow to the entity; and when specific criteria have been met. Revenue from the provision of visual, lighting and audio solution services is recognised when the services have been rendered. Revenue represents the net invoiced value of services rendered, after allowances for trade discounts. The Group s revenue recognised during each of the three months ended 31 March 2018 and 2017 are as follows: Three months ended 31 March HK$ 000 HK$ 000 (Unaudited) (Unaudited) Revenue from services 34,677 31,463 4 EXPENSES BY NATURE Three months ended 31 March HK$ 000 HK$ 000 (Unaudited) (Unaudited) Material cost of consumables 1,298 1,197 Freight expenses 1, Equipment rental cost 9,265 7,448 Travel expenses Depreciation of property, plant and equipment 2,948 3,351 Operating lease payments 1,250 1,292 Employee benefit expenses 13,917 13,155 Entertainment expenses Motor vehicle expenses Other expenses 2,039 1,815 Total cost of sales, selling expenses and administrative expenses 33,406 30, AV PROMOTIONS HOLDINGS LIMITED First Quarterly Report 2018

14 5 INCOME TAX The amount of taxation charged to the unaudited condensed consolidated income statement represents: Three months ended 31 March HK$ 000 HK$ 000 (Unaudited) (Unaudited) Current income tax Hong Kong The PRC & Macau (8) (63) (8) (63) Deferred income tax Income tax credit Hong Kong, the PRC and Macau profits/income tax has been provided at the rate of 16.5%, 25% and 12% respectively, on the estimated assessable profits for each of the three months ended 31 March 2018 and DIVIDEND The Directors do not recommend the payment of dividend for the three months ended 31 March 2018 (three months ended 31 March 2017: Nil). AV PROMOTIONS HOLDINGS LIMITED First Quarterly Report

15 7 BASIC AND DILUTED EARNINGS PER SHARE (a) Basic The basic earnings per share is calculated by dividing the profit attributable to owners of the Company by the weighted average number of ordinary shares in issue during the respective years. The weighted average number of ordinary shares used for such purpose has been retrospectively adjusted for the effects of the issue of shares in connection with the Reorganisation completed on 10 April 2017 and the 299,999,000 shares by way of capitalisation were deemed to have been in issue since 1 January Three months ended 31 March (Unaudited) (Unaudited) Profit attributable to owners of the Company (HK$ 000) Weighted average number of shares in issue (thousands shares) 400, ,000 Basic earnings per share (HK cents) (b) Diluted Diluted earnings per share presented is the same as the basic earnings per share as there were no potentially dilutive ordinary share outstanding as at 31 March 2018 and AV PROMOTIONS HOLDINGS LIMITED First Quarterly Report 2018

16 MANAGEMENT DISCUSSION AND ANALYSIS BUSINESS REVIEW AND OUTLOOK The Group is principally engaged in the provision of visual, lighting and audio solution services in Hong Kong, the PRC and Macau. The Group derived its revenue from provision of the aforesaid services to exhibition, ceremony, conference, concert, TV show, product launch and other types of event. During the three months ended 31 March 2018, we participated in visual, lighting and audio projects including but not limited to (i) various large scale auto shows in the PRC; (ii) luxury brand product launch; (iii) opening ceremory of new broadcast media in Hong Kong; (iv) Hong Kong International Film & TV Market; (v) Asian Financial Forum; and (vi) beauty contest. The Shares were successfully listed on the GEM of the Stock Exchange by way of placing and Share Offer on 21 December 2017, which marked a significant milestone for the Group. The net proceeds raised from the Listing of approximately HK$27.6 million will help the Group to implement its business plan, which includes (i) acquisition of advanced visual, lighting and audio equipment; (ii) setting up a new studio in Shanghai and; (iii) improving operating efficiency development of a new backdrop construction team and hiring technicians. The Group believes that the successful implementation of the above business plan will help the Group to strengthen its position as one of the leading visual, lighting and audio solution provider in Hong Kong, the PRC and Macau and create long-term Shareholders value. The above business plan laid a solid foundation for the achievement and the growth of the Group. The Board will also proactively seek potential business opportunities so as to broaden the sources of income of the Group and enhance value to the shareholders of the Company (the Shareholders ). FINANCIAL REVIEW Revenue The Group generates revenue from the provision of one-stop visual, lighting and audio solutions to its customers in various events, including exhibition, ceremony, conference, concert, TV show, product launch and others. The Group s revenue increased from approximately HK$31.5 million for the three months ended 31 March 2017 to approximately HK$34.7 million for the three months ended 31 March 2018, representing an increase of approximately 10.2%. AV PROMOTIONS HOLDINGS LIMITED First Quarterly Report

17 Revenue analysis by geographical location The following table sets out the revenue of the Group by geographical location during the three months ended 31 March 2018 with comparative figures for the three months ended 31 March Three months ended 31 March HK$ 000 % HK$ 000 % (Unaudited) (Unaudited) The PRC 15, , Hong Kong 16, , Macau 3, , Total 34, , During the three months ended 31 March 2018, the Group has increased number of projects in Hong Kong. Therefore, the Group had a higher revenue in Hong Kong as compared with the period ended 31 March Cost of sales Cost of sales mainly comprised of equipment rental cost, depreciation of visual and display equipment, employee benefit expenses paid to front line on-site technical staff, material cost of consumables and freight expenses of equipment delivery. The Group s cost of sales increased by approximately 6.3% from approximately HK$24.0 million for the three months ended 31 March 2017 to approximately HK$25.5 million for the three months ended 31 March 2018, which is primarily due to increased number of projects and the increase of revenue of approximately HK3.2 million as compared to the three months ended 31 March Gross profit Gross profit of the Group for the three months ended 31 March 2018 amounted to approximately HK$9.2 million (2017: HK$7.5 million), representing gross profit margin of approximately 26.5% (2017: 23.9%). The increase in gross profit is primarily due to the increase of revenue of approximately HK$3.2 million as compared to the three months ended 31 March Selling expenses Selling expenses mainly comprised of staff cost and travel expense of sales and marketing department and entertainment expense in association with business solicitation. The Group s selling expenses increased by approximately 22.2% from approximately HK$0.9 million for the three months ended 31 March 2017 to approximately HK$1.1 million for the three months ended 31 March 2018, which is primarily due to the increase in sales staff cost at approximately HK0.2 million. 15 AV PROMOTIONS HOLDINGS LIMITED First Quarterly Report 2018

18 Administrative expenses The administrative expenses of the Group mainly include administrative staff costs, rent and rate and other sundry expenses. The Group s administrative expenses increased by approximately 21.1% from approximately HK$5.7 million for the three months ended 31 March 2017 to approximately HK$6.9 million for the three months ended 31 March 2018, primarily due to the increase in administrative staff cost at approximately HK1.0 million. Finance expenses net The finance expenses net of the Group mainly consist of interests on bank borrowings which were wholly repayable within five years, interest expenses on obligations under finance leases and interest income from daily bank balance and deposit. The Group s finance expenses net increased by approximately 20.0% from approximately HK$1.0 million for the three months ended 31 March 2017 to approximately HK$1.2 million for the three months ended 31 March 2018 which was mainly due to the new borrowings from banks obtained during the year ended 31 December Income tax expenses The Group is subject to income tax on an enterprise basis on profits arising in or derived from the jurisdictions in which members of the Group are domiciled and operate. During the three months ended 31 March 2018 and 2017, major PRC subsidiaries of the Company were subject to an Enterprise Income Tax rate of 25.0%. The Hong Kong subsidiary of the Company was subject to Hong Kong profit tax at the rate of 16.5% on the estimated assessable profits during the three months ended 31 March 2018 and Profit for the period As a result of the foregoing, the Group s profit was approximately HK$68,000 for the three months ended 31 March 2018 (three months ended 31 March 2017: approximately HK$22,000). There was no significant change in the amount of profit for the period. Contingent Liabilities As at 31 March 2018 and 2017, the Group did not have any significant contingent liabilities. Exposure to Fluctuations in Exchange Rates The Group s revenue and costs are primarily denominated in Hong Kong dollars and Renminbi ( RMB ). The Group currently does not have a foreign currency hedging policy. However, the Directors continuously monitor the related foreign exchange exposure and will consider hedging significant foreign currency exposure should the need arise. AV PROMOTIONS HOLDINGS LIMITED First Quarterly Report

19 Use of Proceeds and Comparison of Business Objectives with Actual Business Progress The net proceeds received by the Company from the Share Offer, after deducting underwriting commission and professional expenses in relation to the Share Offer, amounted to approximately HK$27.6 million. The actual net proceeds from the Listing was different from the estimated net proceeds of approximately HK$25.0 million as set out in the prospectus of the Company dated 8 December 2017 in relation to the Share Offer (the Prospectus ) and approximately HK$29.5 million as set out in the announcement of the Company in relation to the allotment result dated 20 December 2017 (the Allotment Result Announcement ). The Group adjusted the use of proceeds in the same manner and same proportion as set out in the Prospectus and the Allotment Result Announcement. An analysis of the utilization of the net proceeds from the Listing Date up to 31 March 2018 is set out below: Utilized amount Unutilized from the Listing amount Date up to as at Net proceeds 31 March March 2018 HK$ million HK$ million HK$ million Acquisition of advanced visual, lighting and audio equipment (including equipment to be used in the new studio in Shanghai) Setting up a new studio in Shanghai (excluding the cost of equipment purchase to display in the studio) Improving operating efficiency development of new backdrop construction team and hiring technicians General working capital and other corporate use The Directors expect that the implementation plan of setting up a new studio in Shanghai will commence during the year ending 31 December 2018 as the Group is in the process to identify a suitable location for setting up the studio. The Directors intend to continue to apply the remaining net proceeds in accordance with the uses and in the proportions as stated in the Prospectus and the Allotment Result Announcement. The unused net proceeds have been placed as interest bearing deposits with licensed financial institutions in Hong Kong. 17 AV PROMOTIONS HOLDINGS LIMITED First Quarterly Report 2018

20 OTHER INFORMATION DIRECTOR S RIGHTS TO ACQUIRE SHARES OR DEBT SECURITIES Save as disclosed in this report, at no time during the three months ended 31 March 2018 was the Company or any of its subsidiaries, or any of its fellow subsidiaries, a party to any arrangement to enable the Directors or chief executive of the Company (including their spouses or children under 18 years of age) to have any right to subscribe for securities of the Company or any of its specified undertakings as defined in the Companies (Directors Report) Regulation or to acquire benefits by means of acquisition of shares in, or debentures of, the Company or any other body corporate. DIRECTORS AND CONTROLLING SHAREHOLDERS INTERESTS IN COMPETING BUSINESS The Directors are not aware of any business and interest of the Directors nor the controlling shareholders of the Company nor any of their respective close associates (as defined in the GEM Listing Rules) that compete or may compete with the business of the Group and any other conflict of interests which any such person has or may have with the Group during the Reporting Period. PURCHASE, SALE OR REDEMPTION OF LISTED SECURITIES Neither, the Company nor any of its subsidiaries redeemed, purchased or sold any of the Company s securities during the Reporting Period. DIRECTORS SECURITIES TRANSACTIONS The Company has adopted a code of conduct regarding directors securities transactions on terms no less exacting than the required standard of dealings set out in Rules 5.48 to 5.67 of the GEM Listing Rules. Having made specific enquiries of all Directors, the Company confirms that all of the Directors complied with such required standard of dealings and its code of conduct regarding directors securities transactions during the Reporting Period. DIRECTORS AND CONTROLLING SHAREHOLDERS INTERESTS IN CONTRACTS Save as disclosed in this report, none of the Directors or an entity connected with any of them had any material interest, whether directly or indirectly, in any transaction, arrangement or contract of significance in relation to the business of the Group to which the Company or any of its subsidiaries, parent company or subsidiaries of the parent company was a party and subsisting at any time during or at the three months ended 31 March As at 31 March 2018, no contract of significance had been entered into between the Company, or any of its subsidiaries and the controlling shareholders of the Company or any of their subsidiaries. AV PROMOTIONS HOLDINGS LIMITED First Quarterly Report

21 DISCLOSURE OF INTERESTS (a) Interests and short positions of Directors and chief executive in the shares, underlying shares and debentures of the Company and its associated corporations As at the date of this report, the interests and short positions of the Directors or the chief executive of the Company in the shares, underlying shares and debentures of the Company or its associated corporations (within the meaning of Part XV of the Securities and Future Ordinance (the SFO )) which were required (i) to be notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part V of the SFO (including interests and short positions which they were taken or deemed to have under such provisions of the SFO); or (ii) pursuant to section 352 of the SFO, to be entered into the register required to be kept therein; or (iii) pursuant to Rules 5.46 to 5.67 of the GEM Listing Rules relating to securities transactions by directors to be notified to the Company and the Stock Exchange, were as follows: (i) Interests in the Company Capacity/Nature Number of Percentage of Name of Director of Interest Shares shareholding (Note 1) Mr. MP Wong Interest of a controlled 300,000,000 (L) 75% (Notes 2 & 3) corporation; founder and beneficiary of a discretionary trust Notes: 1. The letter L denotes the person s long position in the Shares. 2. The 300,000,000 Shares are held by Mega King, a company wholly-owned by Jumbo Fame, which is in turn held by Trident Trust Company (HK) Limited ( Trustee ) acting as the trustee of The WMPE Family 2017 Trust. The WMPE Family 2017 Trust is an irrevocable discretionary trust set up by Mr. MP Wong as settlor and appointer and by the Trustee as the trustee on 10 April The beneficiaries of The WMPE Family 2017 Trust are Mr. MP Wong, Mrs. Wong, Mr. Wong Hin Hang (the son of Mr. MP Wong and Mrs. Wong), Ms. Wong Hin Fei (the daughter of Mr. MP Wong and Mrs. Wong), and such person as may be appointed as additional member or members of the class of eligible beneficiaries pursuant to a trust deed dated 10 April 2017 entered into by Mr. MP Wong as the settlor and the appointer and by the Trustee as the trustee ( Trust Deed ). Mr. MP Wong as settlor, appointer and a beneficiary of The WMPE Family 2017 Trust is deemed or taken to be interested in the 300,000,000 Shares held by Mega King. 3. Mr. MP Wong is the founder of the Group, an executive Director and the chairman of the Company. Mr. MP Wong is the sole director of Mega King and therefore Mr. MP Wong is deemed or taken to be interested in the entire issued share of Mega King and the 300,000,000 Shares beneficially owned by Mega King. 19 AV PROMOTIONS HOLDINGS LIMITED First Quarterly Report 2018

22 (ii) Long position in the shares of associated corporations Name of associated Capacity/Nature Number of Percentage of Name of Director corporation of Interest Shares shareholding (Note 1) Mr. MP Wong Mega King Interest of a controlled corporation; 1 100% (Note 1) founder and beneficiary of a discretionary trust Mr. MP Wong Jumbo Fame Founder and beneficiary of (Note 1) a discretionary trust % Note: 1. Mr. MP Wong is the founder of the Group, an executive Director and the chairman of the Company. Mr. MP Wong is the sole director of Mega King and therefore Mr. MP Wong is deemed or taken to be interested in the entire issued share of Mega King. Mr. MP Wong as settlor, appointer and a beneficiary of The WMPE Family 2017 Trust is deemed or taken to be interested in the entire issued shares of Jumbo Fame. Mr. MP Wong is also one of the directors of Jumbo Fame. Save as disclosed above, as at the date of this report, none of the Directors or the chief executive of the Company had any interests or short positions in the shares, underlying shares or debentures of the Company or its associated corporations (within the meaning of Part XV of the SFO) which were required (i) to be notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part V of the SFO (including interests and/or short positions which they were taken or deemed to have under such provisions of the SFO); or (ii) pursuant to section 352 of the SFO, to be entered into the register required to be kept therein; or (iii) pursuant to Rules 5.46 to 5.67 of the GEM Listing Rules relating to securities transactions by directors to be notified to the Company and the Stock Exchange. AV PROMOTIONS HOLDINGS LIMITED First Quarterly Report

23 (b) Interests and short positions of the substantial shareholders and other persons in the shares and underlying shares of the Company As at the date of this report, so far as it is known to the Directors, the following persons (not being a Director or chief executive of the Company) had or were deemed to have interests or short positions in Shares or underlying Shares which were recorded in the register required to be kept by the Company under Section 336 of the SFO, or which would fall to be disclosed under the provisions of Divisions 2 and 3 of Part XV of the SFO. Capacity/Nature Number of Shares Percentage of Name of shareholder of Interest held/interested shareholding (Note 1) Mega King (Note 2) Beneficial owner 300,000,000 (L) 75% Jumbo Fame (Note 2) Interest of controlled corporation 300,000,000 (L) 75% Trustee (Note 2) Trustee 300,000,000 (L) 75% Mrs. Wong (Note 3) Interest of spouse 300,000,000 (L) 75% Notes: 1. The letter L denotes the person s long position in the Shares. 2. The 300,000,000 Shares are held by Mega King, a company wholly-owned by Jumbo Fame, which is in turn held by the Trustee acting as the trustee of The WMPE Family 2017 Trust. The WMPE Family 2017 Trust is an irrevocable discretionary trust set up by Mr. MP Wong as settlor and appointer and by the Trustee as the trustee on 10 April The beneficiaries of The WMPE Family 2017 Trust are Mr. MP Wong, Mrs. Wong, Mr. Wong Hin Hang (the son of Mr. MP Wong and Mrs. Wong), Ms. Wong Hin Fei (the daughter of Mr. MP Wong and Mrs. Wong), and such person as may be appointed as additional member or members of the class of eligible beneficiaries pursuant to the trust deed. By virtue of the SFO, each of Jumbo Fame and the Trustee is deemed to be interested in all the Shares held by Mega King. 3. Mrs. Wong is the spouse of Mr. MP Wong and is deemed or taken to be interested in all the Shares held by Mega King for the purpose of the SFO. Save as disclosed above, as at the date of this report, the Directors have not been notified by any person who had interests or short positions in the Shares or underlying Shares as recorded in the register required to be kept pursuant to Section 336 of the SFO, or which would fall to be disclosed under the provisions of Divisions 2 and 3 of Part XV of the SFO. 21 AV PROMOTIONS HOLDINGS LIMITED First Quarterly Report 2018

24 Corporate Governance Practice The Board is responsible for performing the corporate governance duties in the Corporate Governance Code and Corporate Governance Report (the CG Code ) as set out in Appendix 15 of the GEM Listing Rules, which includes developing and reviewing the Company s policies and practices on corporate governance, training and continuous professional development of Directors, and reviewing the Company s compliance with the principle and applicable code provision in the CG Code and disclosures in this report. During the Reporting Period, the Company has complied, to the extent applicable and permissible with the principles and applicable code provisions of the CG Code. Communication with shareholders and investor relations The Company believes that maintaining a high level of transparency is a key to enhancing investor relations. It is committed to a policy of open and timely disclosure of corporate information to its shareholders and investment public. The Company updates its shareholders on its latest business developments and financial performance through its annual, interim and quarterly reports. The corporate website of the Company ( has provided an effective communication platform to the public and the shareholders. Share option scheme The Company has adopted a share option scheme on 1 December 2017 (the Share Option Scheme ). The principal terms of the Share Option Scheme are summarised in Appendix IV to the Prospectus and are in accordance with the provisions of Chapter 23 of the GEM Listing Rules. The main purpose of the Share Option Scheme is to attract and retain the best available personnel, to provide additional incentive to employees (fulltime and part-time), directors, consultants, advisers, distributors, contractors, suppliers, agents, customers, business partners and service providers of the Group and to promote the success of the business of the Group. No share option has been granted, exercised, cancelled or lapsed under the Share Option Scheme since the adoption of the Share Option Scheme and there was no share option outstanding as at 31 March Dividend The Directors do not recommend payment of dividend for the three months ended 31 March AV PROMOTIONS HOLDINGS LIMITED First Quarterly Report

25 INTERESTS OF THE COMPLIANCE ADVISER As at 31 March 2018, neither Halcyon Capital Limited, the compliance adviser of the Company, nor any of its directors, employees or close associates had any interests in the securities of the Company or any other companies in the Group (including option or rights to subscribe for such securities) pursuant to Rule 6A.32 of the GEM Listing Rules. Audit Committee The Company established the Audit Committee on 1 December 2017 with written terms of reference in compliance with Rules 5.28 and 5.29 of the GEM Listing Rules. The Audit Committee comprises three independent non-executive Directors, namely Mr. Chow Chun To, Mr. Chen Yeung Tak and Mr. Cheung Wai Lun Jacky. Mr. Chow Chun To is the chairman of the Audit Committee. The unaudited condensed consolidated financial information of the Group for the three months ended 31 March 2018 have not been audited or reviewed by the Company s auditor, PricewaterhouseCoopers, but have been reviewed by the Audit Committee, which is of the opinion that the first quarterly financial information comply with the applicable accounting standards, the Stock Exchange and legal requirements, and that adequate disclosures have been made. By order of the Board AV Promotions Holdings Limited Wong Man Por Chairman Hong Kong, 10 May 2018 As at the date of this report, the Board comprises four executive Directors, namely, Mr. Wong Man Por, Mr. Wong Hon Po, Mr. Wong Chi Bor and Ms. Fu Bun Bun and four independent non-executive Directors, namely, Mr. Chow Chun To, Mr. Chen Yeung Tak, Mr. Cheung Wai Lun Jacky and Mr. Chan Wing Kee. 23 AV PROMOTIONS HOLDINGS LIMITED First Quarterly Report 2018